The Impact of Being a Border Region in Business Demography: An Analysis in the European Union

The Impact of Being a Border Region in Business Demography: An Analysis in the European Union

Paulo Ferreira (Polytechnic Institute of Portalegre, Portugal & VALORIZA - Research Center for Endogenous Resource Valorization, Portalegre, Portugal & Instituto Politécnico de Portalegre, Portalegre, Portugal), Luis Loures (Research Centre for Endogenous Resource Valorization, Instituto Politécnico de Portalegre, Portugal & VALORIZA - Research Center for Endogenous Resource Valorization, Portalegre, Portugal & Instituto Politécnico de Portalegre, Portalegre, Portugal) and Miguel Serafim (Instituto Politécnico de Portalegre, Portalegre, Portugal)
DOI: 10.4018/978-1-7998-2513-5.ch002
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Abstract

The promotion of the entrepreneurship has been a challenge in recent years because it is recognised that entrepreneurial activity enhances economic growth. Border regions, because of the possibility of increasing cooperation between economic agents, gained a special status. Still, some of those cross-border regions continue to grow slower than other regions. Authors analyse business dynamics and entrepreneurial activities at a regional basis for the EU. Considering data availability, authors analyse 13 different countries. Indicators under analysis are birth rates, death rates, business churn, and survival rate. This chapter identifies and analyses the existence of significant differences between regions located alongside border areas, and analyses if there exist differences depending on the countries of those regions. To compare business demographic indicators, parametric tests will be used. The results are analysed considering the potential differences between cross-border and non-cross-border regions.
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Background

Entrepreneurship is often used in several different contexts: newspapers, social media or even politicians’ speeches are just some examples. The linkages between entrepreneurship and economic growth, and the capability of being an enhancer of economic development are usually referred in the literature, since entrepreneurship could make countries to prosper economically, increasing citizens’ well-being (Acs, Audretsch, Braunerhjelm, & Carlsson, 2012; Galindo & Méndez, 2014, among many others). The effects of entrepreneurship in economic growth are increased in the cases when it is based on knowledge (Audretsch, 2007; Audretsch & Keilbach, 2004a, 2004b, 2007, 2008, among others).

Despite the usual identification of entrepreneurship with the creation of new firms, it is considered that birth rates could be just a part of the whole set of entrepreneurships. In fact, there is not a unique definition for entrepreneurship, but many studies refer to Schumpeter (1934) and its creative destructive paradigm as being in the origin of the concept, when he identified economic dynamics caused by the appearance of more efficient companies, leading to the destruction of other less efficient ones. By this motive, it is used in this study not only information of birth rates but also other demographic statistics indicators to analyse the phenomenon of entrepreneurship, namely death rates, business churn and survival rates.

Key Terms in this Chapter

ANOVA test: Test used to analyse the existence of not of differences in means among different groups.

Survival Rate: The percentage of firms which continue to work, after a given time span.

Business Churn: The sum of birth and death rates, which could be considered as firms’ dynamics, according to Schumpeter.

Birth Rate: The percentage of firms created in a given year, based on the existing firms. It is one possible measure of entrepreneurship.

Death Rate: The percentage of firms that close in a given year, being a possible indicator of firms’ dynamics.

Business Demography: The whole set of indicators that could explain business dynamics.

Tukey HSD test: Test used to identify differences in means between pairs of groups.

NUTS III: Territorial units corresponding to sub-regional level.

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